Capitalism undermines the natural systems that support human well-being for the same reason it undermines civil society: the values it elevates above all others are incompatible with human or natural flourishing. Capitalism fails to achieve the minimal ethical standards to maintain a decent society. Until recently this failure was masked (and for libertarians and market liberals remains masked) because capitalism arose in largely liberal societies where democracy and civil society ensured economic activity took place within a thick moral context not reducible to market values. However, like an invasive species, over time capitalist institutions grew and eventually overran much of the human sphere, increasingly subjecting it to the thin moral context of formally voluntary contractual exchange alone. Over time capitalism would overrun even these minimal values.
In Part I. I argued capitalism undermines both democracy and civil society, and in doing so ultimately also the market order that sustains it. In Part II. I explored how capitalism is antithetical to the well-being of laboring people and is compatible with slavery, genocide, and other kinds of human degradation so long as sufficient consumers exist somewhere else to buy what is thereby produced. I have shown how checks on capitalism’s treatment of humans as well as the details of property rights rely on extra-systemic values and institutions that subordinate the market and capitalism to thicker moral frameworks than can be derived from the principle of contractual exchange alone. And I have shown capitalism ultimately eliminates most labor because labor is ultimately a cost to be minimized. However, as labor is minimized capitalism undermines the conditions of its own existence which depends on consumer spending. Because in capitalism most consumer spending depends on employment, it is internally self-destructive.
I have made my case by developing unexplored implications in F. A. Hayek’s argument for why markets are by far the superior means of coordinating economic life. When we read him attentively the distinction between markets and capitalism becomes critically important, even though Hayek himself scarcely saw it. Now we need to expand our scope, to show why capitalism is also intrinsically destructive to the natural world that sustains us.
Ecosystems and economics
Markets create a kind of economic ecology within which people and enterprises pursue their goals very much as organisms do within a biological ecology. This comparison is common in economics, biology, and philosophy, and in keeping with Hayek’s focus on markets as spontaneous orders.
This similarity deepens when we realize, as did Hayek, that the market ecosystem is itself immersed within a more inclusive social ecosystem rather like a forest ecosystem is immersed within the larger natural one of the earth. The larger shapes the smaller, and is itself influenced in return. A forest ecosystem can be undermined by changes taking place within it and by external changes within the more enveloping ecosystem. Similarly, market ecosystems can be undermined not only by changes internal to them, like the growth of monopolies, they can also be undermined by changes within the larger social ecosystem upon which they depend, as when corporate interests change the rules of the game.
The nature of nature
By nature I mean the other-than-human world within which we live, from which we sprang, and on which we depend for our long term well being. Increasingly scientists are learning this dependency holds true for our psychological well-being as well as for maintaining physical health. We are more intimately connected to this planet than the abstractions of ‘economic man’ and ‘rational action’ can grasp.
Human beings both love nature and seek to control it. Within any society there are those who relate to the natural world as amorally as a sociopath relates to other beings and those who recognize it as beautiful and intrinsically valuable. Most of us see it as both a storehouse of resources and as valuable in its own right.
The US has long sought to preserve wild nature and ruthlessly exploited it for economic gain. Our idea of national parks has been copied more than any of our political institutions. At the same time this society has exterminated or nearly exterminated many species that once caused wonder and delight among the first European explorers. It currently threatens more. However, this tension between love and utility goes more deeply than just American culture. It goes to the center of who we are as human beings.
Before we can understand capitalism and nature we need to understand this tension. Only then can we fully appreciate the vastly greater problems raised by capitalism, and understand why capitalism is intrinsically incapable of interacting sustainably with the natural world.
A core distinction
In one sense we are a part of nature. We evolved from our not-human ancestors in a chain of descent ultimately going back over a billion years. We express this heritage in our metabolism, our senses, and our physical and psychological needs. But in another sense as a species we differ radically from the rest of nature.
Human beings are not faster or stronger than many other animals. Even so we wield vastly disproportionate power over other life forms on which we depend. We usually attribute this to our intelligence, which is flattering but a bit misleading. We are cleverer, but in a way not usually appreciated.
Human intelligence comes with little in the way of basic instincts to orient us in the world. If necessary, a newborn fawn can soon run. Absent that necessity it knows to lie quietly to avoid predators. A human baby will take a year to walk, two to run. As for being quiet . . . . If individual intelligence were all we had as an advantage, we might well be extinct.
Our real advantage lies outside our bodies, in society. F. A. Hayek emphasized we are essentially cultural beings, writing “Mind is as much a product of the social environment in which it has grown up and which it has not made as something that has in turn acted upon and altered these institutions.” (1973, 17) Our minds consist of far more than what our individual intelligence can observe, discover, or create.
The secret of imitation
Experiments comparing the ability of children and young chimpanzees to learn by copying what they see another do led to unexpected results. Like human children, young chimpanzees will copy others. But later, if they grasp certain steps in a copied sequence are unnecessary, they will skip them. Children do not. Even when they are told about extraneous steps rather than having to figure it out for themselves, children still perform all of the steps in the sequence they learned, necessary and unnecessary ones alike. They apparently prefer rote repetition, perhaps as a kind of game, whereas the chimp focuses pragmatically on “getting the treat.” As I read this research I remembered how children like being read to before bed, and woe to the nighttime reader who changes a line in a favorite story, for the child has memorized it.
Superficially it appears young chimps are more rational than children. They are in the narrow economic sense. But this conclusion misses something important about human rationality. In a study comparing the role of copying and imitation in children and chimpanzees, the authors observed that chimpanzees learning from copying.
quickly become habitual, restricting what alternative methods can be switched to, even where the benefits appear manifest. Children, by contrast, demonstrated cumulative cultural learning. . . . Chimpanzees [who learned one technique] failed to upgrade to an improved technique for gaining food discovered by a few members of the group; moreover, practitioners of this technique later prevented from using it failed to copy the simpler method of others, which remained productive. . . . What appears to be revealed [in chimps] is a social learning propensity that is initially capable of the sophisticated levels of copying [but] any one context quickly becomes ‘canalized’ or crystallized, producing a routine resistant to cumulative or other change.
What most distinguishes the rationality of chimps from that of humans is the different role culture plays in our respective species. The core of our cleverness turns out not to be our individual psychology or fitness alone, but rather our ability cumulatively to increase the knowledge made available culturally. This appears related to our being more socially embedded in our learning than are chimpanzees.
Perhaps a conservatism similar to chimps once characterized our thinking about the nature of what we took for granted. However, as people develop greater repertoires of cultural practices conflicts between them would eventually arise, requiring us to resolve the problem. Developing language skills and reasoning capacity to do so would provide enormous advantages to groups acquiring them. Hayek argued the human mind arose out of these efforts. He emphasized mind is a product of cultural evolution, based more on imitation than on insight or reason. (1988, 21)
Discovering how useful but sometimes contradictory habits fit together also encourages us to focus on the larger context beyond what we have memorized. Ultimately these efforts lead to questioning the meaning lying behind matters of practicality, such as the relation of life to death, of self-interest to that of others, or of want to plenty. Some animals are aware of these issues, but only in very concrete contexts. (Bekoff, 2009) So far as we know, no chimp ever wonders about them.
Many other species also have cultures, but their cultures apparently do not build on themselves. They can incorporate a discovery but they do not, or barely, accumulate knowledge so that initial discovery is gradually built upon. For example, over time chimpanzees do not seem to improve their styles of cracking nuts, a many step process different from eliminating unneeded steps.
Culture over genes
Evolutionary biologist Mark Pagel observed of us “unlike all other animals, we have two distinct and fully fledged systems of inheritance: one genetic and one cultural.” (2015, 44) Our cultures are repositories for knowledge existing independently of any individual but accessible to all. They furnish us with our languages, religions, sciences, technologies, music and art, and how we initially conceive our relations with other people and with the other than human world. Of course we can modify any of them, but we always do within an existing cultural context taking most of the rest for granted.
Cultural inheritance is largely independent of genetic inheritance and operates far more rapidly. It is more Lamarckian than Darwinian because acquired habits can be passed on to the next generation. It goes beyond Lamarck because we can learn from anyone, and not just benefit from our parents’ experiences. Therefore culture can ‘mutate’ rapidly. People born in 1900 into a world where horses and buggies were common could watch the first man step onto the moon on television in 1969. A cell phone today has more computing power than the computers on board Apollo 11 during our first lunar landing. People born during that time now take for granted a worldwide connectivity via personal computers, the internet, and smart phones. If these transformations had to happen through genetic evolution, the earth would not last long enough to bring them about. With cultural evolution they occurred within a single lifetime.
The same genes have mostly shaped humanity as a whole biologically for many generations. Despite this lack of genetic diversity we have achieved remarkable diversity between and rapid change within cultures. Further, the children of immigrants from one culture easily grow up as members of their parents’ adopted one. Culture freed us from the domination of genes.
But there is a catch to all this. Culture and the power it makes possible also disconnects us from the natural world that sustains us.
The great division
Non-human creatures participate in a dynamic pattern of relationships ultimately benefiting most species living within ecosystems through a process of mutual adaptation. This happens not through deliberate actions on their part, but genetically through intricate relationships developed between predators and prey and adaptation to non-biological changes within their environment. By freeing us to some significant extent from immediate dependency on our reciprocal relationship with the rest of the world, culture created the possibility of our unintentionally degrading our environment through the greater power it made possible for us, power insulated from negative feedback in the short run. The immediate wielder of power benefited, with the price deferred for years.
Societies that long persisted and thrived generally discovered ways for limiting this power. In part this was through passing on knowledge as to the best way to farm or otherwise take resources from the natural world. Traditional farming is famously conservative, which helps protect long term processes from short term desires. However these practices usually had an even deeper ethical foundation, situating its economic activities within larger ethical and customary contexts.
For example, Northern Pacific coast Indian tribes had the technological means and short term economic motives for eliminating salmon from much of their environment. Dried salmon was an important trade good. Yet despite their having been fished for thousands of years, when Europeans encountered them the salmon runs were enormous. The various tribes accomplished this through subordinating their economic interests to ethical and religious ones. One example was the First Salmon ceremony, which subordinated fishing to larger ethical contexts, even to the salmon themselves. https://www.nwcouncil.org/history/FirstSalmonCeremony In addition, major weir and dam constructions with the power to devastate salmon runs were subordinated to a larger ethical context. (Pierce, 1991)
Possibly the most advanced accomplishment of California Indian cultures was the fish dam on the Klamath at Kepel. Several hundred people were involved in the annual construction of this dam. Every aspect of its construction and use was highly ritualized: it consisted of exactly ten panels, was built in ten days, and was fished for only ten days. This community project ensured that subsistence needs of all river tribes would be met, and salmon runs perpetuated.
Those cultures that did not succeed in subordinating economic to ecological values found themselves in slowly degrading environments requiring them to adapt to progressively less favorable circumstances. When the Iliad was written, Greeks ate beef. By Plato’s time they ate fish. Plato shed light on why.
In his Critias Plato wrote “the land [of Greece] was the best in the world,” but “in comparison of what then was, there are remaining only the bones of the wasted body,” whereas “all the richer and softer parts of the soil having fallen away, and the mere skeleton of the land being left.” He added “In the primitive state of the country, its mountains were high hills covered with soil, and the plains, were full of rich earth, and there was abundance of wood in the mountains. Of this last the traces still remain . . . although some of the mountains now only afford sustenance to bees.” In words all too familiar to us today he observed “There were many other high trees [and] abundance of food for cattle. Moreover, the land reaped the benefit of the annual rainfall, not as now losing the water which flows off the bare earth into the sea, but, having an abundant supply in all places.” He concluded “Such was the natural state of the country, which was cultivated, as we may well believe,” by “lovers of honour, and of a noble nature, and had a soil the best in the world, and abundance of water, and in the heaven above an excellently attempered climate.”
Environmental degradation was not just a Greek problem. For one example among many, in Mesopotamia early farmers raised wheat on irrigated soil. Over time the soil became increasingly salty, making it unfit for wheat. The more salt resistant barley replaced wheat, but ultimately farming collapsed as even barley could not grow on the ruined land. Environmental degradation contributed to the collapse of the Sumerian civilization and its replacement by Babylon to the north.
Even in societies that had developed the customs needed to preserve sustainability greed or short sightedness could undermine hard won cultural wisdom. Desire for new goods made available through trade with Europeans undermined Northeastern Indians’ long stable patterns of sustainable hunting for skins, ultimately destroying animal populations. Greed over ran ethical standards that had evolved over thousands of years. (Martin, 49)
An economy that consumes its capital will decline and ultimately fail. For the same reasons an ecology that consumes its natural capital will also ultimately decline and fail, but this failure normally takes longer to manifest. Our short term interests combined with this lag lead us to consume natural capital more easily than we consume economic capital. When unfettered by ethics our power makes this easy.
This problem is not uniquely human. Any successful new species devoid of checks by predators or disease will also transform its environment. But because of our immensely greater culturally rooted power, this issue pertains to us more than to any other species that has ever lived on this planet.
Some, particularly cornucopians such as Julian Simon, respond that if the original resource runs out humans can substitute one resource for another. Simon was correct but blind to context. Today in oceanic fisheries, as one species of fish is depleted another is pursued until it also becomes rare, and another takes its place. But when used without restraint this capacity to adapt, so useful in the short run, exterminates or virtually exterminates species after species and ecosystem after ecosystem.
Setting aside the powerful ethical issue of needless extinctions, the core problem cornucopians and their allies ignore is that most species and all ecosystems play a multiplicity of roles whereas economically commodities play only one. Salmon are not commodities but are treated as such while their other impacts are considered “externalities.”
When salmon runs are exterminated through over fishing, disease from salmon farms, and dams, their role as a conveyer belt returning nutrients from the ocean to the land comes to an end. As it does, the forests and wildlife within salmon ecosystems are gradually deprived of nutrients from the sea and grow more slowly and less abundantly, hurting the lumber industry as well as the ecological ‘services’ forests provide. These disturbing results have shown up in mere decades, and we plan on being on this planet for a long time to come.
However property rights are defined they cannot address such problems unless ethical questions are confronted first because how they are answered shapes what possibilities exist for making money. When only commercial value matters EXXON’s record of ignoring its own scientists while dishonestly funding global warming deniers simply good management.
The centrality of ethics
How might we establish an economy that consumes neither its human nor its natural capital? Only by subordinating economic activity to ethical standards that cannot themselves be reduced to economic ways of thinking.
Capitalism is not sustainable in the long run because it treats everything as resources for obtaining money, but money alone cannot maintain either a complex society or an ecosystem. In the second essay I demonstrated capitalism is compatible with slavery so long as there are enough non-slave consumers to buy its products. Slavery was abolished not due to economic reasoning but to moral and ethical reasoning. Quakers counted far more than economists in bringing it to an end.
The same point is equally true regarding natural values. To work well contractual property rights require clear boundaries between one piece of property and another. Within human societies up to a point this can be achieved, though even here economists admit “externalities” arise where boundaries break down. The natural world replicates this issue much more strongly, for the web of life is incredibly complex, boundaries are open, and relations are often symbiotic as well as competitive.
“Property” exists within two realms and capitalism considers only one. What we call “private property” is really a bundle of rights, and we can exchange some, none, or all of them. For example, a landlord exchanges the right to live in his property for rent, but in other respects the property remains his. The larger the ‘bundle’ of rights, the greater the variety of potentially beneficial exchanges that can be made by owners. The opportunities for this to happen are increased when boundaries for rights are firmly established and defined so it is easy to reach agreements about what is mutually beneficial. On the one hand, as economists emphasize, property, or property rights, can be exchanged and in a free society people generally exchange what they value less for what they value more.
But what we call “property” also plays a role in natural systems where boundaries are porous or nonexistent. I have mentioned how salmon runs make for larger richer forests Short of owning the oceans in which they swim, the rivers and streams in which they spawn, and the forests around them, there is no way for economic reasoning to “internalize the externalities” involved with treating salmon simply as a resopurce. The market relies on firm boundaries and ecosystems rely on many such boundaries being porous or non existent.
This is why in an ecology we can never do just one thing, and there is no way to internalize the costs of what we do until we have internalized the ecology as a whole. Because this is impossible and because the advantages in the short run of ignoring ecological relationships the better to make economic gains are so great, in the absence of ethical values overriding economic values, the long run destruction of natural systems is guaranteed.
Because it subordinates all values to economic return, capitalism makes this problem incapable of resolution. Capitalism is not the cause of our problems creating a sustainable society, but its domination makes accomplishing this task impossible.
The technological fix
Technological discoveries have accomplished magnificent things. They will play a central role if society is to become sustainable. But they are not simple outgrowths of market processes. Technology and creativity work most in service to sustainability when they are encouraged and empowered by extra-economic values such as clean air for all, clean water for all, or good health for all.
For example, technology can potentially solve the crisis in global warming. Nearly everything needed to do so already exists and ironically the market is the best way to achieve it, with proper definitions of property rights. But capitalism subordinates the market to acquiring capital. Far greater subsidies are going to the most destructive technologies and large companies often battle against policies encouraging wiser energy production, because the largest of them have enormous amounts invested in fossil fuel energy. EXXON is by far the worst example, but hardly alone.
Redefinitions of property rights to require CO2 producing energy to pay for some nontrivial approximation of its genuine costs must come from outside the economy, as have all other effective environmental regulations. Such regulations have always been opposed by industries benefiting from the status quo no matter who is ultimately injured. Such opposition is completely in character. We witnessed the same pattern of dishonesty in service to profit regarding tobacco.
For another example, in the 80s corporations and the advocates of capitalism they financed argued strenuously against the ‘cautionary principle,” a moral argument that new substances introduced into the environment should be evaluated for harm before being used. They argued this was unnecessary.
Honeybees are globally responsible for pollinating at least 90% of the world’s commercial crops, are in serious biological trouble with widespread colony collapses and a recent study indicates a new neonicotinoid pesticide is a significant factor in this crisis. The report’s authors concluded: “As long as acute toxins remain the basis of agricultural pest control practices, society will be forced to weigh the benefits of pesticides against their collateral damage. Nowhere is this tension more evident than in the system with the world’s most widely used insecticide, the world’s most widely used managed pollinator and Europe’s most widely grown mass flowering crop.”.
Technology needs a moral framework to be able to be wisely used because ultimately technology is about power. It cannot provide that moral framework on its own.
Civil society plus democracy provides a means by which non-economic reasoning and values can improve the context within which economic activity takes place. When combined with democracy, civil society is at least potentially able to harmonize the modern human world with natural values, though it does not guarantee it. It gave us our national parks and national forests, our wild and scenic rivers, the Endangered Species Act, and laws dramatically improving our air and water. It has saved the Atlantic cod from extinction, enabled waterfowl to recover from the over hunting driving them to extinction, and enabled buffalo to be seen by millions. Otherwise they would also almost certainly be extinct, as happens any other animal whose existence got in the way of making money and are not protected by extra-capitalist measures. (Or people, remember the Dutch East India Company described in Part II.)
By freeing economic activity from any but considerations of short term utility and profit, capitalism is parasitic on both civil society and the natural world. Values essential to the maintenance of civil society, the market, and nature cannot be fully monetized and to the limited degree they can, they will be manipulated by capitalist enterprises to subordinate them to capitalist values. The rules governing the market will increasingly be changed to benefit corporate power, as with the provisions on intellectual property in the TPP. The greatest long term environmental threat of our time, global warming, is deliberately confused and hidden by massive disinformation campaigns by the energy industry. Entire cities and perhaps millions of people will be sacrificed to protect corporate profit.
In the absence of a strong push-back, these practices will not stop until everything is monetized or social and ecological systems collapse. As bad as the former would be, the likelihood of the latter happening first is far greater. The rapid decline of America’s middle class and increase in global warming and ocean acidification is evidence this is so.
Back to the market
As Hayek pointed out perhaps more insightfully than anyone before him there is no alternative to market processes for sustaining a complex society such as ours. Central planning cannot do it. Nor can endless meetings. A freely functioning price system is essential to signal information about how to use resources most effectively to accomplish the largest number of independently chosen plans, and so able to integrate knowledge available to no single source, or even to those possessing it absent the context that brings it to their attention.
And yet capitalism can so dominate the market that it becomes socially and now environmentally destructive. As with labor the solution is subordinating the market more thoroughly to the thick value context of civil society. Not only should corporations not be allowed to own land or engage in activities that require their maintaining ecological health to exist long term, alternative institutions need to be able to replace them.
Happily such institutions have long existed. Individually or family owned farms and ranches are capable of such operation. Land trusts have grown rapidly throughout the country, providing ways traditional agriculture and ranching can survive in the face of rapidly increasing land values by removing them from subordination to the price system. National forests can be immunized from the power of capitalist wealth unattached to place by becoming forest trusts. Communities under intense pressure to develop their lands in ways that ultimately price out their original inhabitants can adopt a variant of this model.
Tax policies can shift from taxing what is desired, such as labor, to what we wish to have less of, such as carbon dioxide. A carbon tax gradually increasing until there is no more addition of human created CO2 in the atmosphere is economically identical in its impact to a natural resource becoming scarce and as it rises in price more efficient uses are developed as well as increasing reliance on substitutes. Environmentally our ability to adapt by finding substitutes becomes a strength and not a weakness.
The income from such a tax could be offset by reducing Social Security taxes proportionately, making labor cheaper without reducing wages even as it makes CO2 production more expensive. Peter Barnes’ Capitalism 3.0 gives another good approach relying on the market. That the energy industry calls such proposals “socialist” is one more example of capitalism’s intellectual and moral bankruptcy.
Earlier societies’ mixed record of successes and failures means that even with ideal institutions we are not guaranteed success. The creativity and vitality of those acting within civil society is still needed. But when capitalism is eliminated from interacting with natural processes the task at least becomes doable. Domination by capitalism is incompatible with a decent life on earth for human beings and viable alternatives are all around us, if we but open our eyes to see them.